Forged Signature on a Check – Who is Liable? Legal Guidelines Check Holders Should Know

As we all know, a “check” is an important financial document used for various transactions, whether it’s for paying for goods, borrowing money, or other business transactions. However, if a check is forged and then cashed, it can affect the check owner, the bank, and the check recipient. So in such a case, who is liable? And what are the preventive measures? Let’s find the answers in this article from Wongkorn Law Office.

Forgery of Signatures on Checks and Cashing Them

Forgery of signatures on checks occurs when someone impersonates the account holder’s signature and presents the check to a bank for payment or uses it as evidence in various transactions. If the bank fails to conduct proper verification and approves the withdrawal without realizing the signature is forged, the account holder or check bearer often suffers the damage.  

Common Scenarios Include: 

– Insider Fraud: Close associates or employees forging the account holder’s signature to cash checks.  

– Scam Operations: Fraudsters using scanning or forgery techniques to create fake checks and cash them at banks.  

– Lost or Stolen Checks: Someone finding a lost check, forging the signature, and cashing it.  
The Critical Question: When a forged check is cashed, who is liable?

Who is Liable Between the Check Owner, Bank, or Forger?

1. The Person Who Forged the Signature

The individual who forged the check commits a criminal offense under the Thai Penal Code, Section 264 (document forgery), punishable by:  

– Imprisonment up to 5 years ,  

– A fine not exceeding 100,000 THB , or  

– Both imprisonment and a fine.  

2. The Bank That Cashed the Forged Check 

Banks are obligated to verify signatures before processing checks. If a bank negligently approves a forged check, the account holder can hold the bank liable.  

Key Supreme Court Precedents:

1. Supreme Court Judgment No. 1405/2557: A bank that paid out on a check with a forged drawer’s signature was held liable to reimburse the customer, as the payment resulted from the bank’s failure to verify the signature, breaching its deposit account agreement.  
2. Supreme Court Judgment No. 3776/2537: The court ruled that a bank must bear responsibility for cashing a check with a forged signature, as this constituted negligence in its duty to scrutinize signatures.  

These rulings confirm that banks must carefully examine signatures and will be held accountable for approving forged checks.  

3. The Account Holder Who Issued the Check Generally, the account holder is not liable for forged checks. However, if the holder was negligent—such as failing to safeguard their checkbook or carelessly issuing checks—the bank may refuse reimbursement.

How to Prevent Signature Forgery on Checks  

To prevent damage caused by signature forgery on checks, the following preventive measures should be taken:  

✅ 1. Carefully verify the signature and details on the check

•  Avoid pre-signing checks.  
•  Use a signature that is difficult to forge.  

✅ 2. Safely store checkbooks

•  Prevent others from accessing your checkbook.  
•  Use a safe or secure location to store checks.  

✅ 3. Set up transaction alerts with your bank

•  Enable SMS notifications or banking app alerts to monitor all transactions.  
• If any suspicious withdrawals are detected, contact the bank immediately.  

✅ 4. Report forgery immediately if detected

• Gather all relevant evidence, such as copies of the forged check and bank statements.  
•  File a police report to take legal action against the offender.

What to Do If Your Check is Forged?

If you discover that your check has been forged, you should take the following steps immediately:  

1️⃣ Contact Your Bank Immediately  

   – Notify the bank to suspend any related transactions and request a copy of the forged check.  

2️⃣ File a Police Report

   – Submit all evidence to the police so they can take legal action against the perpetrator.  

3️⃣ Consult a Lawyer to Pursue Legal Action  

   – A lawyer can help determine whether the bank was negligent in processing the forged check.  

   – Provide guidance on filing both civil and criminal lawsuits.  

   – Assist in gathering evidence to claim compensation for damages.  

Wongsakorn Law Office specializes in cases involving check forgery and financial fraud. Our team of experienced lawyers is ready to advise and support you through every step of the legal process.  

In conclusion , Check forgery is a serious legal issue that can lead to significant financial losses. Those who forge signatures commit a criminal offense, and banks that negligently process forged checks may be held liable for reimbursing the account holder.  

To prevent check forgery, Always verify signatures, Store checkbooks securely and Use your bank’s transaction alert system.  

If you suspect check forgery, report it to the police immediately and consult a lawyer to take legal action.  

If you need legal assistance regarding check forgery, Wongsakorn Law Office is ready to provide expert advice and representation to ensure you receive the justice you deserve.  >> Contact Us <<